Sun International Hotels Limited (NYSE: SIH – news) reported net income for the quarter, before losses attributed to its recently launched SunOnline internet gaming operations, of $31.8 million compared to recurring earnings of $32.9 million in the same period last year. On this basis, earnings per share for the period were $1.12 compared to recurring earnings per share of $1.20 for the same period last year. Non-recurring items in 2001 included pre- opening expenses and sale of real estate at the Company’s Paradise Island operations.
The Company reported EBITDA for the quarter, excluding SunOnline, of $54.2 million as compared to $55.5 million in the same period last year. Butch Kerzner, President of the Company commented, “We are very pleased with the quarter’s results. The return of business at Atlantis so soon after September 11 has been excellent. After a somewhat slower January, the property returned to 2001 levels for February and March. Consistent with our strategy not to engage in price discounting, but rather to focus on maintaining rate integrity supported by stronger marketing efforts, we were able to maintain Atlantis’ room rate for the quarter. In March, Atlantis recorded the highest monthly revenues in its history.”
Including the net loss from SunOnline, the Company recorded net income in the quarter of $29.6 million, compared to net income of $33.2 million for the same period last year. On this basis, fully diluted earnings per share for the quarter were $1.04 compared to $1.21 for the same period last year. As previously announced, on February 15, 2002, the Company agreed to sell 50% of SunOnline, the Company’s online gaming subsidiary, to Station Casinos, Inc. in a transaction that is expected to close in the second quarter of 2002.
Paradise Island
During the quarter, the Company’s Paradise Island operations achieved a record EBITDA of $51.2 million compared to $50.8 million achieved during the same period last year. The situs poker online growth in EBITDA was achieved despite a decline in net revenues of $6.2 million. The Paradise Island operations benefited from the cost controls that were instituted during the last quarter of last year resulting in EBITDA margins increasing from 35.5% last year to 37.5%.
Atlantis’ revenue per available room (“RevPar”) for the quarter was $240, a 6% decline from the same period last year. RevPar trends experienced sequential improvement by month, as comparative RevPar declined by 17% and 8% in January and February, respectively, but increased in March by 2%. For the quarter, Atlantis achieved 85% occupancy at a $284 average daily room rate (“ADR”), the same rate as last year.
Call levels for the quarter into the Company’s wholly owned tour operator increased by 11% as compared to the same period last year. Call levels for April are on a pace to increase by 16%. Casino volumes have also been strong. Table drop declined by 17% in the quarter, which was almost entirely attributable to the timing of the Michael Jordan Celebrity Invitational that occurred in January of last year. The tournament has been rescheduled for September. Slot volumes were the same as last year’s strong first quarter.
The Company’s luxury resort hotel on Paradise Island, the Ocean Club, also performed well and has established itself as one of the premier hotels in the Caribbean. RevPar in the quarter increased by 13% to $612 in the current year from $542 in the same period last year. The ADR was $865 compared to $739 for the same period last year, which management believes is one of the highest ADRs for any resort property in the Caribbean. The resort has recently enhanced its amenities through the opening of the Ocean Club Spa, which is a new concept in spa design that is designed to provide a uniquely private and exclusive spa experience.
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